Commonwealth Consolidated Acts

[Index] [Table] [Search] [Search this Act] [Notes] [Noteup] [Previous] [Next] [Download] [Help]

INCOME TAX ASSESSMENT ACT 1997 - SECT 703.37

Disregarding certain preference shares following an ADI restructure

  (1)   The object of this section is to ensure that, following an * ADI restructure to which Part   4A of the Financial Sector (Transfer and Restructure) Act 1999 applies, a body corporate is not prevented from being a * subsidiary member of a * consolidated group or * consolidatable group just because the body (or another body corporate) has issued, or issues, certain preference * shares.

  (2)   This Part (except Division   719) operates as if a body corporate that meets the requirement of subsection   (3) at a particular time were a * wholly - owned subsidiary of another body corporate (the holding body ) at the time.

  (3)   The body corporate (the preference - share issuing body ) must be one that would be a * wholly - owned subsidiary of the holding body at the time if the * shares in the preference share - issuing body that are to be disregarded under subsection   (4) did not exist.

  (4)   Disregard a * share in the preference - share issuing body if:

  (a)   a restructure instrument under Part   4A of the Financial Sector (Transfer and Restructure) Act 1999 is in force in relation to a non - operating holding company within the meaning of that Act; and

  (b)   because of the restructure to which the instrument relates, an * ADI becomes a subsidiary (within the meaning of that Act) of the non - operating holding company; and

  (c)   the preference share - issuing body is:

  (i)   the ADI; or

  (ii)   part of an extended licensed entity (within the meaning of the * prudential standards) that includes the ADI; and

  (d)   the shares are covered by subsection   (5).

  (5)   A * share is covered by this subsection if:

  (a)   the share is a preference share; and

  (b)   any * return on the share is fixed at the time of issue by reference to the amount subscribed; and

  (c)   the share is not a * voting share; and

  (d)   either:

  (i)   the share is Tier 1 capital (within the meaning of the * prudential standards); or

  (ii)   the share would be Tier 1 capital (within the meaning of the prudential standards) were it not for a limit, imposed by those standards, on the proportion of Tier 1 capital that can be made up of such shares.

  (6)   Paragraph   (5)(a) covers a preference share if it is issued:

  (a)   by itself; or

  (b)   in combination with one or more * schemes that are * related schemes in relation to a scheme under which a preference share is issued.

  (7)   If subsection   (5) has covered a * share, but would (apart from this subsection) stop covering the share from a particular time, then for a period of 180 days after that time the subsection is taken to continue to cover the share.


AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback